Social media is fast becoming the most effective approach to boost brand awareness, understand the customer, get feedback, as well as direct traffic to a company’s web site and/or stores.

We like to track the Facebook activities and monthly fan base growth for the retailers and brands that we follow (and many others). Click here to see our compilation of monthly Facebook ‘fan’ numbers for October 2011 (‘fan’ stats as of 10.31.2011).

Now for this month’s highlights.

It is worth noting that out of the 188 retail chains/brands covered in this survey, the following were the largest percentage gainers of ‘fans’ in October 2011 versus the prior month:

Naturally, most of the above have a small base. Therefore, let’s look at the largest percentage gainers of ‘fans’ in October 2011 versus the prior month for brands with greater than 1.0 million ‘fans.’

Conversely, It is worth noting that out of the 188 retail chains/brands covered in this survey, the following were the lowest percentage gainers of ‘fans’ in October 2011 versus the prior month:

Additional Notes:

Coca Cola (KO) had the largest number of ‘fans’ at the end of October 2011 with 35.5 million followed by Starbucks (SBUX) at 25.9 million.

Wal-Mart (WMT) seems to have really embraced social media over the past 12-18 months.

The number of ‘fans’ at Kohl’s (KSS) dwarfs that of their department store peers.

Why would Pacific Sunwear (PSUN) have a larger ‘fan’ following than Urban Outfitters (URBN)? Mind boggling.

Cotton Faces Challenges Along Supply Chain Click to Open PDF
Great primer on the most important apparel crop. It’s worth noting that the 2011-12 cotton crop is expected to be the largest since 2004-05.
Posted: Monday, November 7, 2011
Source: WWD

More Retailers Attack at ‘Black Midnight’ Click to Open PDF
Interview with BBY CEO Brian Dunn highlights how difficult this store opening change is for store-level employees. Also, some retailers actually have some experience with the earlier opening (e.g. Toys R Us, GPS, SHLD).
Posted: Monday, November 7, 2011
Source: WSJ

European Retailers Brace for Tough Holiday Season Click to Open PDF
You think it’s ugly here in the U.S.? It’s a much worse consumer environment in Europe. Interestingly, one survey suggests that Germans are the most likely to spend of all the Euro nations.
Posted: Monday, November 7, 2011
Source: WWD

Target Announces Free Shipping Every Day on Target.com for REDcard Purchases Click to Open PDF
Merchandise margins will continue to be under attack as free shipping becomes the industry standard.
Posted: Monday, November 7, 2011
Source: Company Press Release

Buyers Don’t Cotton to Crop Click to Open PDF
We’re not out of the woods just yet. There’s a shortage of high-quality fiber. One independent analyst suggests that there could be an excess of the kind of cotton “you don’t want” and a shortage of the kind of cotton “you want.”
Posted: Monday, November 7, 2011
Source: WSJ

New CEO Ron Johnson has a monumental challenge staring him in the face at J.C. Penney (JCP – $33.05). The problem is that it’s going to get much worse before it gets any better.
(Click here to view TRG’s latest research note on JCP)

Departing CEO Mike Ullman should have been replaced much sooner. A glance at the below trailing 4-quarter EBIT margin rates for both JCP and M highlight the relatively miserable financial performance JCP delivered under Mr. Ullman’s watch, especially the past 2-3 years. Note: JCP’s numbers excluding lower Pension Expense over the past 6 quarters would look even worse than what is depicted below.

Mr. Ullman’s ridiculous suggestion on the Q2 2011 conference call that its “identified growth initiatives” are performing double digits ahead of last year should be investigated by the SEC. This statement by an outgoing CEO is an affront to the company’s investors and a black eye to Mr. Ullman as he prepares to leave the company.

JCP Q2 2011 Conference Call – August 12, 2011 – CEO Mike Ullman

“Our identified growth initiatives – Liz Claiborne, Sephora Inside J.C. Penney, our tops business, modern shoes and handbags, fast fashion, Modern Bride, fine jewelry, housewares, and center core – are performing double-digit ahead of last year.”

JCP management can talk about improving the “center core” of the store and its various “growth initiatives” all they want. But, the company’s comp store sales results in the past 3-4 years have come up well short of its peer group.

We’re well below the consensus in Q4 2011 as 2-year profitability comparisons materially toughen. In the long run, incoming CEO Ron Johnson may be able to provide a needed spark to get this ship moving in the right direction. Let’s face it, the proverbial ‘bar’ has been set extremely low by his predecessor.

But, it’s going to get much uglier before investors begin to see tangible signs of hope. How plans on delivering EPS north of $1.60 next year is beyond us ($2.04 current consensus estimate).

October Retail Sales Fall Short of Hopes Click to Open PDF
There were probably more clever excuses for relatively weak sales yesterday than we’ve seen in a while.
Posted: Thursday, November 3, 2011
Source: WSJ

Consumers Have Word for the Economy, and It’s Not Good Click to Open PDF
Yikes! “Bad” was the top choice for consumers when expressing their view of the economy. A 4-letter expletive even made the Top 15.
Posted: Wednesday, November 2, 2011
Source: WWD

Hamburgers, Fries and a Shakeout Click to Open PDF
The fact is, winners are winning and losers are losing. Friendly’s, Chevys, and Quiznos are not losing due to higher commodity costs. They’re losing because they’re getting out-flanked by superior management teams.
Posted: Tuesday, November 1, 2011
Source: WSJ

Macy’s Spends $400 million to Update Manhattan Flagship Store Click to Open PDF
CEO Terry Lundgren suggests that “experience shows that improvements in this location consistently result in higher customer traffic and sales volume.” Yet, the last major renovation of the store was in the 1970’s. Hmmm. That said, this renovation is long overdue.
Posted: Tuesday, November 1, 2011
Source: WSJ

Holiday Shopping’s New Hour: Midnight Click to Open PDF
Retailers are getting desperate. But, what’s interesting is that it appears that JCP won’t be joining their peer group and will instead open at 4:00am (KSS announced their midnight opening the next day). JCP has miserably underperformed over the past few years, but now they’re just giving up.
Posted: Tuesday, November 1, 2011
Source: WSJ

Each month, we provide our clients an early analysis of sales disclosures on sales release Thursday. Below, are a few bigger picture thoughts that we published earlier this morning prior to the opening bell.

Don’t Buy The Unseasonable Weather Excuse

Last year, the following monthly reporting retailers complained about unseasonable weather in October 2010: BONT, DEST, JCP, KSS, M, SMRT, SSI, TGT, and TJX. (more…)